1. Part 3: Understanding Key Issues with Financial Management
9/25/2012
Part 3: Understanding Key Issues with Financial Management
Financial Literacy Series
Gina McDonald, CPA, Lead Consultant
May 1, 2018

2. “RE”-Introductions & initiative overview
9/25/2012
“RE”-Introductions & initiative overview

3. Part 1: Understanding Financial Statements and Reports
Financial Literacy Webinar Series
Part 1: Understanding Financial Statements and Reports
March 20, 2018
Tara Acker
Mentor

4. Welcome & Introductions
Today’s Presenter
10/4/2012
Welcome & Introductions
Gina McDonald
Lead Consultant, FMA

5. Welcome & Introductions
If you missed Parts 1 & 2 …
10/4/2012
Welcome & Introductions

6. Essential IRS Classifications
9/25/2012
Agenda
Essential IRS Classifications
Strategic Financial Management Overview
Levels of Financial Management
Board’s Role
Policies and Procedures and Internal Controls
Effective Dashboards for Performance Management
Q&A !
Fine tune this

7. Strategic Financial Management
9/25/2012
Strategic Financial Management

8. financial management overview
9/25/2012
financial management overview

9. Levels of Financial Management
10/4/2012
Levels of Financial Management
Level
Function
Strategic
Lead and support organizational financial planning and monitoring
Managerial
Ensure that the finance office is effectively carrying out its operational responsibilities
Transactional
Perform day-to-day accounting functions, data entry, and administrative tasks.
SHARED RESPONSIBILITY
Adapted from Jeanne Bell Peters and Elizabeth Schaffer, Financial Leadership for Nonprofit Executives: Guiding Your Organization to Long-term Success © 2005

10. Financial Monitoring for Camp Staff
Financial Decision-Making Meetings: Action Steps
Form the team: Include key representatives from Senior Camp Staff (Camp Director, Asst. Director, Facilities Director, Kitchen Manager, Finance)
Establish a meeting calendar with specific dates, times, and topics for discussion/decision
Ensure the right data and reports are available 2-4 days prior to the meeting for review by participants
Take note of agreed upon action steps and circulate immediately after the meeting

11. Financial Monitoring for Camp Board
10/4/2012
Financial Monitoring for Camp Board
Strategic Financial Management
Lead and support organizational financial planning and monitoring
Planning - starts with budget process
Monitoring – continuous process to
reality-test assumptions
Board’s monitoring activities can START
at the Finance Committee level . . .

12. Financial Monitoring for Camp Board
9/25/2012
Financial Monitoring for Camp Board
Board Monitoring can START at Finance Committee:
Finance Committee
Full Board
Monitors and responds to the financial realities of the organization as presented by the Executive Director/CFO, in cooperation with the Treasurer
Reviews financials in detail and meets frequently
Fiduciary responsibility, which requires understanding overall financial position
Duty of care, which includes safeguarding assets
Cannot delegate responsibilities to a committee in place of individual responsibility

13. Financial Monitoring for Camp Board
Where does the Board /Committees begin?
Understand whether policies and procedures are documented and up-to-date
Inquire as to adequacy of controls . . .

14. Financial Management- Internal Controls
9/25/2012
Financial Management- Internal Controls
Control activities are achieved through:
Policies
Resolutions adopted by the Board
Procedures
Specific tasks & measures
Internal Controls are the culmination of both

15. Financial Management-Internal Controls
Internal Controls are designed to prevent and detect:
(2 main types of fraud)
Good controls
Timely, Accurate Financial Reports
Fraudulent Financial Reporting
Misappropriation of Assets

16. Financial Management-Internal Controls
Identity risk specific to your Camp
Design Policies, Procedures & Controls to mitigate risk
A/P
Payroll
Petty Cash

17. Financial Management-Internal Controls
Policies, Procedures and Controls
Policy
Spending policy limiting camp management approval to $10,000
Procedure
Dual approval required for invoices over $10,000 prior to being entered into A/P
Control – periodic random selection of invoices over $10K to ensure procedure is followed

18. Goals – Internal Controls
9/25/2012
Goals – Internal Controls
All cash is timely deposited
Revenue is properly recorded, including pledges receivable and considering donor restrictions
Deferred camp revenue is not prematurely recorded as revenue
Cash Receipts & Revenue
All payables are recorded timely
Only approved expenses are paid – spending authority levels
Signatory levels
Petty cash is adequate controls and at an appropriately level
Cash Disbursements & Expenses
Only approved changes are allowed in payroll system (pay rate changes, etc.)
All payroll is approved by supervisor before being paid
Payroll

19. 9/25/2012
Question BREAK

20. Dashboards & Performance Management

21. What is Performance Measurement?
Community Foundation of Greater Des Moines OnTrack - DashBoards: A Tool to Leverage Your Nonprofit's Data for Increased Effectiveness
What is Performance Measurement?
Performance Measurement definitions from the experts:
Continuous tracking of data with the objectives of learning, accountability and continuous improvement
Key Performing Indicators (KPI) involve articulating what an organization is trying to accomplish and then identifying the most meaningful and useful indicators of success.
Regular measurement of the results (outcomes) and efficiency of services or programs
Sources (from top to bottom): Measurement as Learning: What Nonprofit CEOs, Board Members, and Philanthropists Need to Know to Keep Learning, The Bridgespan Group, April 2011; The Balanced Scorecard ( Performance Measurement: Getting Results, Harry Hatry, The Urban Institute Press, 2006
Thank you to Principal for their support of this session

22. What is Performance Measurement?
Community Foundation of Greater Des Moines OnTrack - DashBoards: A Tool to Leverage Your Nonprofit's Data for Increased Effectiveness
What is Performance Measurement?
The Performance Measurement Cycle:
Define
Implement
Monitor
Evaluate
Refine
Tie what you measure to intended impact
Identify areas for improvement and develop a plan
Be consistent in data entry and interpretation
“The experiences of exemplars in the social sector offer the following five lessons that suggest how to get a productive performance measurement system up and running”
“Critical questions for each lesson:
Begin with the end in mind: Can we articulate, in one sentence, who or what ends our organization serves and what change we seek to create, when?
Anchor measurement in your theory of change: Can we tie each and every metric we collect to at least one decision that tests whether our theory of change is working?
Create a culture of measurement: Does the leadership of our organization (including the board) use data to make decisions? Have we created the right forums for staff at all levels to wrestle with the data and use it to drive improvements, all in real-time?
Ensure all contributors benefit: Have we identified each player that contributes to or uses the measurement system and how they gain value from it?
Get better at measurement over time: Has our organization mapped out how our measurement approach will get better as we mature and evolve?”
-all from Bridgespan article
Establish mechanisms to understand what is working and what isn’t
Track trends in metrics as well as process
Thank you to Principal for their support of this session

23. What should we measure? KPI’s - metrics used to assess performance
Community Foundation of Greater Des Moines OnTrack - DashBoards: A Tool to Leverage Your Nonprofit's Data for Increased Effectiveness
What should we measure?
KPI’s - metrics used to assess performance
Successful Key Performance Indicators (KPIs) will:
Represent business model drivers
Reflect progress toward intended outcomes
Guide priorities and decisions (“what gets measured gets done”)
The “Key” in KPIs is important: limit total KPIs to a number that can realistically be monitored
A set of KPIs isn’t forever: metrics should be periodically reassessed for efficacy and organizational alignment
The total number of KPIs is dependent on level/scope
Explain business model
Thank you to Principal for their support of this session

24. KPIs can be defined across all areas of your Camp
9/25/2012
What should we measure?
KPIs can be defined across all areas of your Camp
Cost per Camper/Ratios
Fundraising Goals
Staffing Levels
Cash Flow
Enrollment
Pipeline/Retention
Financial Aid Levels

25. What will your Dashboard look like?
Community Foundation of Greater Des Moines OnTrack - DashBoards: A Tool to Leverage Your Nonprofit's Data for Increased Effectiveness
What will your Dashboard look like?
Dashboards should be presented in a user-friendly format:
Create a “snapshot” of organization performance
Display current status and trends
Clearly show performance against defined targets
Highlight out-of-the-ordinary results
Thank you to Principal for their support of this session

26. Performance Dashboard: Sample 1

27. Performance Dashboard: Sample 2
9/25/2012
Performance Dashboard: Sample 2

30. Reflection STOP START CONTINUE
9/25/2012
Reflection
STOP
START
CONTINUE
From the start results, what are the projects that you will prioritize to implement?
Personal, not organizational

31. 9/25/2012
Questions?

32. Fiscal Management Associates, LLC
9/25/2012
Fiscal Management Associates, LLC
Established in 1999 to serve not-for-profit organizations around the country
Provides customized financial management, accounting, software, organizational development, human resources, and other consulting services
Works directly with organizations or through funder-supported management and technical assistance programs
FMA's mission is to empower not-for-profit organizations with the knowledge and skills to successfully serve their constituents and fulfill their missions
New York | Chicago | Oakland | LA
@FMA4Nonprofits
/FiscalManagementAssociates
linkedin.com/company/fiscal-management-associates-llc